After Grayscale Investments shared information concerning the company’s product holdings, people questioned why the firm wouldn’t share the public addresses associated with the crypto assets it holds. However, on Nov. 23, OXT researcher Ergo published a Twitter thread featuring onchain forensics that confirm Coinbase Custody holds a balance of 633K bitcoin that likely belongs to the Grayscale Bitcoin Trust (GBTC).
OXT Researcher Verifies Grayscale’s Bitcoin Holdings
Five days ago, Bitcoin.com News reported on Grayscale disclosing information tied to the safety and security of the company’s digital assets. Grayscale’s statements were meant to assure the public that the company’s cryptocurrencies are “safe and secure” after the FTX collapse.
The digital asset fund manager detailed that all of the company’s digital assets are stored with Coinbase Custody Trust Company. On the Grayscale website, the firm says Coinbase Custody is a qualified custodian under New York banking laws and the funds are kept in “cold storage.”
The one thing Grayscale did not disclose is the company’s digital asset addresses and it did mention why it chose not to share the wallets. Grayscale explained that it has never publicly disclosed onchain addresses to the general public “due to security concerns.” The claim was criticized and mocked, but Grayscale said that it understood the non-disclosure would be “a disappointment to some.”
Despite Grayscale’s non-disclosure, the OXT researcher (oxt.me) Ergo explained that it started a community-led effort to create transparency around GBTC holdings. “We have taken steps to ID likely GBTC addresses and balances based on public info and blockchain forensics,” Ergo said on Nov. 20.
Leveraging an article from Coindesk, heuristics, and publicly known bitcoin addresses associated with the custodian Xapo, that day, Ergo “attributed 432 addresses holding 317,705 BTC to likely GBTC custody activity.”
The researcher discovered at least 50% of the GBTC holdings and added: “additional work is necessary to ID the remaining addresses.” By 2:49 p.m. (ET) on Nov. 23, Ergo said the additional work was finished in a Twitter thread called: “The Grayscale G(BTC) Coins Part 2” Ergo tweeted:
In this analysis, we use additional [onchain] forensics to CONFIRM the approximate…